A series of consumer surveys conducted on behalf of three Canadian banks are showing that clients and would-be clients are under a considerable amount of strain. Some are merely rethinking their preferred retirement dates, while others are beginning to change the way they invest and others still are finding themselves pressed to meet basic needs.
In one survey, conducted on behalf of RBC Royal Bank, confidence levels among young adults between 18 and 34 is plunging. The annual RBC Financial Independence Poll of 2,005 Canadians in October 2022 found that confidence levels dropped precipitously from 31 per cent in 2021 to just 18 per cent when the survey was conducted in late 2022. The majority, 77 per cent said they were concerned about their cash flow; 34 per cent say they were already living paycheck to paycheck prior to inflation setting in.
Interestingly, 62 per cent say they are setting money aside for their financial portfolios while 30 per cent say building their investment portfolios is a key financial priority. There is an opportunity for education with the cohort, as well, with 44 per cent saying they have little to no knowledge about investing and 77 per cent saying they have not connected with a financial advisor in the past year.
In a broader look at Canadians, including those over age 34, a CIBC poll of 1,544 Canadians conducted in early February 2023 found that Canadians hope to retire at 61, on average, but 66 per cent who are not yet retired worry about running out of money in retirement. Less than half said they felt confident they were saving enough to meet their financial goals. A notable 85 per cent said they do not have a formal financial plan for retirement. (The survey of younger Canadians conducted by RBC found that 54 per cent had no financial plan.)
Those surveyed on behalf of CIBC found a growing number contributing to their Tax-Free Savings Accounts (TFSAs) over their Registered Retirement Savings Plan (RRSP) accounts – 42 per cent say they contributed more to their TFSA. Among the younger cohort surveyed by CIBC, 48 per cent said they will probably shift some off the RRSP and TFSA contributions to a Tax-Free First Home Savings Account (FHSA) once they become available. Of those surveyed overall, 69 per cent said they had a TFSA while just 59 per cent said the same of an RRSP.
Finally, a new poll conducted for Scotiabank, this time 1,505 were surveyed in January 2023, Canadians are worrying about their finances for about 15 hours each week, up from 10 hours a week when compared to the same period a year ago. “The average amount of time Canadians spend worrying works out to roughly 31 days a year,” they state.
Paying for day-to-day expenses was cited as a concern for 44 per cent of respondents, paying off debt worried 39 per cent of respondents and 38 per cent were worried about saving for emergencies. “The average number of hours Canadians spend worrying about their finances each week has grown since July 2021, with notable jumps every quarter,” the Scotiabank announcement continues. Of those surveyed, 71 per cent say their cost of living is increasing faster than their income.
All three institutions, in the release of their findings, advocate for consumers to get the help of a financial advisor.
